- In late July, Volkswagen announced a 700 million US dollar investment in Xpeng, one of China’s successful EV players. Xpeng will be a knowledge and technology provider in this new strategic partnership. The goal is to jointly develop intelligent connected vehicles for the Chinese market.
- While originally forced into Joint Ventures to gain access to the Chinese market, foreign automotive OEMs and suppliers increasingly seek Chinese partnerships to conduct joint research and gain access to advanced technologies.
- In March, Toyota announced to join forces with Chinese OEM Haima to bring fuel-cell driven passenger vehicles to the market in Hainan. Simultaneously to the Volkswagen announcement, Audi said it is planning to extend its partnership with state-owned SAIC to use its EV platform.
- French automotive supplier Forvia, formerly Faurecia, has successively expanded its partnership with Chinese EV manufacturer BYD. They jointly operate seven manufacturing plants in China and are now expanding their supply chains in the Asia-Pacific region with a new assembly plant in Thailand.
- Despite continuing political discussions on de-risking, we will see intensified localization by foreign OEMs in China in order to remain successful in the fiercely competitive Chinese market.
- Besides extending local partnerships, foreign OEMs will also continue doubling down on their own capacities, especially in R&D. BMW just opened a new R&D center in Shanghai in July, where BMW quotes itself to have “ built-up fully-fledged R&D competency and software development capabilities“ for ICVs. Similarly, Volkswagen pooled its R&D activities across its JVs and brands in Hefei with an additional 1bn EUR investment, hoping to significantly shorten innovation cycles.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.